TTM Technologies target raised by B.Riley on growth potential By Investing.com
On Thursday, B.Riley maintained a Buy rating on TTM Technologies (NASDAQ:) and increased the price target to $25.50 from the previous $20.75 for the shares. The firm anticipates that the company will either meet or surpass the second-quarter expectations, given the stable macroeconomic conditions since the last reporting on May 1. TTM Technologies is scheduled to report its second-quarter 2024 results before the market opens on July 31, with a conference call to follow at 1 p.m. Eastern Time.
The analyst from B.Riley projects revenue of $578 million and EBITDA of $77 million for the quarter, which is slightly below the consensus estimates of $583 million in revenue and $78 million in EBITDA. These figures fall near the midpoint of the company’s revenue guidance ranging from $560 million to $600 million.
The earnings per share (EPS) estimates provided by the analyst are also conservative, at $0.16 GAAP and $0.33 pro forma, compared to the consensus of $0.17 and $0.34 respectively, and within the company’s pro forma EPS guidance of $0.32 to $0.39.
Since May 1, shares of TTM Technologies have seen a significant increase of 46%, closing at $14.77, which is a substantial outperformance compared to the 13% rise in the ^RUT index over the same period. This surge has exceeded the firm’s previous price target of $20.75. The analyst believes that TTM Technologies has further potential for growth, citing margin improvements and top-line growth driven by increased production capacity.
The optimism around TTM Technologies is supported by the expansion of its manufacturing capabilities, including the new 800,000 square-foot high-volume facility in Penang, Malaysia. This addition bolsters TTM Technologies’ position as the largest operator of PCB manufacturing footprint outside China.
Furthermore, the company’s $122 million investment in a new Ultra-HDI PCB manufacturing facility near its Syracuse, New York plant, which was acquired with Anaren in 2018, is expected to contribute to future growth.
In other recent news, TTM Technologies has delivered strong financial results in the first quarter of 2024, with non-GAAP earnings per share demonstrating significant year-on-year growth and revenues reaching $570.1 million. This success is largely credited to solid demand in key sectors such as aerospace and defense, and data center computing.
In addition to these financial milestones, TTM Technologies also announced plans for expansion, including a new facility in Penang, Malaysia, and a proposed facility in Syracuse, New York, aimed at enhancing its aerospace and defense capabilities.
The company’s recent developments also include changes to its Board of Directors. TTM Technologies welcomed Mr. Wajid Ali, current CFO of Lumentum Holdings (NASDAQ:) Inc., to its Board following the retirement of Dr. Dov S. Zakheim. Mr. Ali’s financial expertise and experience in the technology sector are anticipated to be beneficial to TTM’s future endeavors.
Needham, an independent analyst firm, maintained a Buy rating on TTM Technologies and raised the share target to $21 from $19, citing the company’s strong performance in the Aerospace & Defense (A&D) and Data Center Computing sectors. These sectors have been key revenue drivers, contributing to over two-thirds of the company’s Q1 revenue.
This performance is expected to support revenue expectations for 2024, despite macroeconomic challenges in other areas of the business. Needham expressed confidence in the potential for TTM Technologies’ shares to continue their upward trajectory, particularly with prospects of a broader business recovery in 2025.
InvestingPro Insights
Following B.Riley’s optimistic outlook on TTM Technologies, InvestingPro data also highlights some key financial metrics that may interest investors. As of the last twelve months leading up to Q1 2024, TTM Technologies boasts a market capitalization of approximately $2.19 billion and a revenue stream of $2.26 billion, despite a slight revenue decline of -8.14%. The company’s gross profit margin stands at 19.08%, which, although not the strongest, is complemented by a solid operating income margin of 5.83%.
InvestingPro Tips suggest that TTM Technologies is expected to see net income growth this year, with analysts predicting the company will be profitable in 2024. Additionally, the company has demonstrated a high return over the last year, with a 51.37% price total return, and it is trading near its 52-week high, at approximately 94.72% of that value. These factors could indicate a robust financial performance in the upcoming earnings report. For more in-depth analysis and additional tips on TTM Technologies, check out InvestingPro at: https://www.investing.com/pro/TTMI. There are 11 more InvestingPro Tips available that could provide further insights into the company’s financial health and stock performance. Remember, you can use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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